Crawley v Baxter

Judgment (6 paragraphs)

[1]

JUDGMENT

On 16 June 2023, I delivered the principal judgment in this matter, upholding the plaintiff's claim for an easement under s 88K of the Conveyancing Act 1919 (NSW) (Conveyancing Act): Crawley v Baxter (No 2) [2023] NSWSC 648. Orders were made for the imposition of an easement for a right of carriageway over the defendant's land in accordance with the details set out in the Schedule and Survey Plans annexed to the judgment, for the plaintiff to pay compensation to the defendant in the sum of $3,500 and for the plaintiff to prepare all necessary documents in relation to the registration of the easement by the Registrar General.
These reasons deal with the issue of costs, with the parties having not reached agreement on that issue. They assume familiarity with and adopt the same terms as those used in the principal judgement.
In accordance with the Court's directions, the parties have filed written submissions and the issue of costs is to be determined on the papers. The parties also rely on further affidavits which they say are relevant to the issue of costs. The plaintiff, Mr Crawley, relies on an affidavit from Bernard Finlay affirmed 15 June 2023. The defendant, Mr Baxter, relies on an affidavit from Damien O'Brien affirmed 14 July 2023. These affidavits should be taken as read and have been taken into account to the extent that they are relevant to the issues raised by the submissions.
The dispute between the parties concerns the costs of the substantive hearing and two notices of motion which were heard and determined prior to delivery of the principal judgment.
The first notice of motion was filed by Mr Baxter seeking leave to reopen to adduce further evidence. The Court granted Mr Baxter's application and made orders granting Mr Baxter and Mr Crawley leave to file and rely on further affidavit evidence and written submissions, with costs reserved: Crawley v Baxter [2022] NSWCSC 1493.

Mr Crawley

Mr Crawley submits that an order contrary to s 88K(5) of the Conveyancing Act should be made and Mr Baxter should be ordered to pay his costs as he says that Mr Baxter did more than reject reasonable offers of compensation and put "the plaintiff to proof". Mr Crawley submits that Mr Baxter actively mounted a detailed case that there were viable alternative routes of access available to Mr Crawley, none of which were ever reasonable alternatives, and put up positive and active opposition to the easement based on evidence which provided no proper support. Mr Crawley submits that, in doing so, Mr Baxter litigated in a manner contrary to the overriding principles of s 56 of the CP Act and caused both parties to incur substantial costs. As put in Mr Crawley's submissions, Mr Baxter's opposition to the s 88K application was "stubborn, intractable and obdurate".
Mr Crawley's submissions address each of the alternative routes proposed by Mr Baxter and contend that the evidence adduced by Mr Baxter in support of each of them was so weak that there was no reasonable justification for putting them forward as alternatives.
In relation to the Copeland Commons Track, Mr Crawley refers to the lack of challenge to the evidence adduced by Mr Crawley in relation to the physical characteristics of that route, Mr Baxter's evidence in cross-examination (24 June T57.42) and the late concession by Mr Baxter's Counsel that the route was not an alternative means of access during closing oral submissions.
Mr Crawley submits that the Craddocks Creek Trail was never a reasonable alternative access route, referring to the reasons in the principal judgment at [219]-[227]. He submits that an inference should be drawn that Mr Baxter's advisors never inspected or obtained detailed instructions about that route before preparing Mr Baxter's affidavit in these proceedings as, had they done so, they would have been aware of the physical conditions and the abandoned mineshaft (as observed at the view on the first day of the hearing). Mr Crawley also contends that the issues with the construction of s 188D of the National Parks and Wildlife Act 1974 (NSW) (NPW Act) ought to have been recognised before the Craddocks Creek Trail was proffered as an alternative access route.
Mr Crawley submits that Mr Baxter's contention that access along the Z to M Track (from Scone Road to point M) was feasible, was always hopeless and should have been recognised as such, and his initial claim that the Upper Triangle section of the Crown Road was an appropriate route was difficult to understand given that Mr Baxter did not point to any disadvantage to an easement following the approximate route of the Copeland Trig Trail (from points D to G) and because the cutting of a new road in the Upper Triangle section would be in breach of the restrictions pursuant to s 88E of the Conveyancing Act in relation to Mr Baxter's use of his land. It was submitted that Mr Baxter should have indicated that he did not oppose an easement utilising the Upper Triangle section earlier to avoid the costs associated with the contentiousness of that route.
Mr Crawley also criticises other aspects of Mr Baxter's approach to the easement and the proceedings, including the following: 1. Mr Baxter's refusal to negotiate prior to the commencement of the hearing and his wholesale opposition to the easement application, referring to Mr Baxter ignoring reasonable offers made by Mr Crawley; 2. Mr Baxter's position regarding public interest, which Mr Crawley says was put in issue in Mr Baxter's submissions and should have been conceded from the outset as it was beyond reasonable argument; and 3. Mr Baxter's objections to Mr Crawley's valuation evidence, which Mr Crawley said contradicted Mr Baxter's written submissions that indicated that the question of compensation would not be a determining factor in the proceedings.
Mr Crawley also says that Mr Baxter gave evidence of matters which, it is submitted, he must have known were untrue and made allegations without foundation; this was described by Mr Crawley as an aggravating feature and unreasonable conduct of the highest order. Reference was made to the following: Mr Baxter's affidavit evidence that compensation had not been offered for the "deviation", which was incorrect; unsatisfactory aspects of Mr Baxter's evidence, such as his evidence about the rock on the Craddocks Creek Trail and his inference that someone had planted false evidence against him, the "bizarre" allegations of a conspiracy between Mr Crawley, his lawyers, MidCoast Council, NSW Telco and NPWS, and Mr Baxter's evidence that the Crown Road continued from his south-western boundary down to Scone Road which was maintained in cross-examination even after he was taken through his own surveyor's evidence to the contrary; Mr Baxter's preparedness to disobey the law by engaging in the unlawful clearing of the Z to M Track and removing the mounds of earth to advance his interests; and the findings in the principal judgment that Mr Baxter's evidence was improbable, new and seemingly inconsistent with his affidavit evidence, self-serving and unconvincing.
Mr Crawley submits that Mr Baxter's motion to reopen aggravated the unreasonableness of Mr Baxter's proposal of the Craddocks Creek Trail as an alternative access as the affidavit in support from Mr Baxter's lawyer conveyed the impression that the whole of the route had been significantly upgraded by major works and that the upgrades provided for "vehicles to use the road safely" such that it was "now trafficable", which was shown to be misleading by the evidence adduced in response from Mr Munro and Mr Finlay. Mr Crawley submits that it would be unjust to have to pay any money in relation to that application and that costs on the indemnity basis should be awarded.
As to the costs of his interlocutory application, Mr Crawley's submissions refer to Mr Baxter having closed off access to the New Track with less than one day's notice, which led to the interlocutory hearing on 18 April 2023. Mr Crawley seeks an order that Mr Baxter pay his costs of the application and the preparation of Mr Finlay's affidavit dated 15 June 2023 on the indemnity basis as the obstruction of the New Track contravened the spirit of Mr Baxter's undertaking and Mr Baxter has subsequently deliberately not complied with Orders 3(c) and (d) made by the Court on 18 April 2023. In support of that submission, Mr Crawley relies on Mr Finlay's affidavit which refers to the placement of heavy logs on the upper slope above the track which carries with it a risk that they may roll downward onto the track. Mr Crawley submits that Mr Baxter's deliberate and ongoing breach of the orders is contemptuous of the Court's authority, reflects Mr Baxter's attitude and conduct in the litigation generally, and should be taken into account when considering the question of whether Mr Baxter's resistance to the order under s 88K of the Conveyancing Act was reasonable.

Consideration and determination

The starting point is that, according to s 88K(5) of the Conveyancing Act, Mr Crawley would be ordered to pay Mr Baxter's costs of the proceedings on the ordinary basis. The question is whether the Court is satisfied, in the circumstances of this case, that some other costs order is warranted. In particular, the Court must consider whether Mr Baxter's conduct was sufficiently unreasonable so as to disentitle him to all or part of his costs, or to warrant an order that he pay all or part of Mr Crawley's costs.
Unreasonable conduct may involve a defendant landowner deliberately obstructing the process, advancing arguments of no merit or being unreasonably responsible for escalating costs: Roma Lopeman v WIN Corp Pty Ltd [2020] NSWSC 1560 at [15]; and McGrath v Mestousis (No 2) [2018] NSWSC 32 at [7]. In that sense, the concept of unreasonableness is similar to that which may exercise the Court's discretion to award indemnity costs.
Turning to the matters raised by Mr Crawley's submissions, Mr Baxter was entitled to reject reasonable offers of compensation without risk of an adverse costs order. However, in my view, Mr Baxter's approach to the pre-suit negotiations was not entirely reasonable. The following matters were indicative of his dismissive approach to the easement application and reflected Mr Baxter's attitude throughout the proceedings that he would not grant an easement to Mr Crawley on any terms: Mr Baxter's rejection of Mr Crawley's 8 February 2019 offer to pay Mr Baxter compensation for the grant of an easement in similar terms to that ordered by the Court and to pay his reasonable legal costs; Mr Baxter's failure to respond to other offers to resolve the dispute, such as Mr Crawley's mediation proposal and the open offer made on 14 April 2021; and the evidence that suggested that Mr Baxter put such correspondence "straight in the bin".
I am not persuaded that Mr Baxter's position in relation to the issues of public interest and compensation was unreasonable in this case. Mr Baxter's evidence and his opening written submissions made it clear that those aspects of s 88K(5) of the Conveyancing Act were not the subject of significant contest, which was confirmed by Mr Baxter's Counsel at the hearing. To my mind, Mr Baxter's stance on those issues, including his making of an evidentiary objection to Mr Crawley's valuation evidence, was not inconsistent with Mr Baxter putting Mr Crawley to proof about aspects of s 88K(5) of the Conveyancing Act, in respect of which Mr Crawley had to satisfy the Court in order to obtain the imposition of the easement and which did not increase the costs of the parties in this case. Relevantly, Mr Baxter did not lead any valuation evidence, cross-examine Mr Crawley's valuer or make any submissions directed to the issue of quantum of compensation at the hearing.
The key issues raised by Mr Baxter in opposition to the proposed easement concerned reasonable necessity, with Mr Baxter contending that there were alternative means of access to the Crawley Land that could be presently used or developed for use, and reasonable attempts, with Mr Baxter contending that Mr Crawley had not made all reasonable attempts to obtain an easement having regard to the alternative access options. The parties directed the bulk of their evidence and submissions to those alternatives access options. Thus, in assessing the reasonableness of Mr Baxter's conduct, it is necessary to focus upon those aspects of his defence to the claim.
Mr Baxter's claim that the Copeland Commons Track could be developed as a viable means of access and use was, in my view, plainly untenable. This was not only due to the physical characteristics of the route (principal judgment at [207]) but also because of the absence of any evidence that the trail had ever been used as an access road to the Crawley Land and the operation of s 188D of the NPW Act. This was a complete answer to Mr Baxter's claim, as his Counsel appropriately conceded albeit during oral closing submissions on the final day of the hearing (T278.40-279.1). As Mr Crawley submits, Mr Baxter adduced no evidence to contradict Mr Crawley's evidence that the "paper Crown Road" had never been constructed and that there was no visible trail and, it seems, took the view that the route was viable because, "with site unseen in the middle section and the fact that it has been deemed a Crown Road it would have to be passable in some way, shape or form" (24 June T57.42).
For the reasons set out in the principal judgment at [208], Mr Baxter's reliance on the Upper Triangle section of the Crown Road as a viable access path which could be developed by Mr Crawley was, in my view, so lacking in merit that it was unreasonable for it to have been raised as an option by Mr Baxter's evidence and submissions. Mr Baxter's Counsel may have accepted that there was a considerable advantage to an easement being imposed over the eastern section of the Copeland Trig Trail to the development of the Upper Triangle section and that it was never really part of Mr Baxter's case that "the point from D to H is the issue" but, like his approach to the Copeland Commons Track, the concession was made during oral closing submissions on the final day of the hearing. It was also after Mr Crawley had adduced evidence to explain the nature and direction of the track which Mr Baxter had forged at the start of the Upper Triangle section, seemingly in aid of his case, that had been observed at the view.
I also consider that Mr Baxter's opposition to the proposed easement based on the two alternative access routes that he ultimately pressed, namely, the Craddocks Creek Trail and the Z to M Track, was unreasonable. For the reasons set out in the principal judgment at [219]-[232], those routes were not currently viable for vehicle access to the Crawley Land and their physical characteristics and their location within the Copeland Tops State Conservation Area meant the prospect of them being developed as alternative access routes for Mr Crawley and his invitees was highly speculative and tenuous at best.
There were also factual matters that Mr Baxter put forward in support of the Z to M Track that were spurious and, in part, manufactured for the purposes of assisting his case. His affidavit and oral evidence to the effect that the Crown Road extended from the boundary of his property at point M down to Scone Road, along the Z to M Track, was contrary to all available evidence, including that from his own surveyor which he refused to accept even when taken though that evidence in cross-examination (24 June T26.13-31.15). His explanation in cross-examination that he had seen such evidence on other maps "[o]ver the years" (24 June T29.28) was improbable and self-serving given that he had not identified or tendered such maps.
As noted in the principal judgment at [102] and [228], Mr Baxter did not have approval from the NPWS or consent under s 138 of the Roads Act 1993 (NSW) to undertake the works to clear the Z to M Track or to remove and then replace the mounds of earth at the entrance to Scone Road that had been placed there by the NPWS to block off the access he had created and to allow the track to rehabilitate. Mr Baxter's actions in that regard were inappropriate and seemingly designed to bolster his case by presenting the Z to M Track in a manner that did not reflect the actual position.
In the context of the long history of the Baxter Land being used in conjunction with the existing Crown Road to access the Crawley Land, the landlocked nature of the Crawley Land and it being surrounded by the Copeland Tops State Conservation Area on all boundaries except the one shared with Mr Baxter, Mr Crawley's case on reasonable necessity and seeking an easement over the Baxter Land was, in my view, a highly meritorious one.
For these reasons, I am not persuaded by Mr Baxter's submission that his actions in defending the application merely put Mr Crawley to proof. I accept Mr Crawley's contention that Mr Baxter actively pursued defences based on various alternative means of access that were unreasonable to pursue in the circumstances of this case such as to warrant departure from the usual costs order under s 88K(5) of the Conveyancing Act.
Nevertheless, I am not persuaded that Mr Baxter's conduct overall was so unreasonable as to warrant the Court making an order that he pay all of Mr Crawley's costs of the proceedings, as Mr Crawley seeks. This is because Mr Baxter was entitled to require Mr Crawley to satisfy the Court of the matters raised by s 88K of the Conveyancing Act, there was a legitimate factual dispute as to the circumstances in which the New Track was constructed by Mr Crawley in 2016 (the determination of which was relevant to the outcome of Mr Crawley's application in so far as it related to the New Track in comparison to the Pre-2016 Route) and Mr Baxter did not advance arguments regarding public interest, reasonable attempts to obtain the easement on the Baxter Land or compensation that led to wasted costs.
Having considered the parties' submissions and weighing all the factors in this case, I have concluded that the Court should exercise its discretion, depart from the usual rule and order Mr Baxter to pay 50% of Mr Crawley's costs of the proceedings (other than in relation to the two notices of motion which I deal with below) on the ordinary basis. In my view, that costs order gives appropriate weight to the matters outlined at [42] above but recognises that Mr Baxter's primary opposition to the easement went beyond putting Mr Crawley to proof as to the reasonable necessity of the proposed easement as he actively advanced the existence of various alternative access routes that were unreasonable to pursue, most of the evidence and submissions were directed to those issues, and Mr Baxter's unreasonable conduct inevitably led to the prolongation of the proceedings and increased costs for which Mr Crawley ought not be responsible and which should be paid by Mr Baxter.
I am also of the view that Mr Crawley should not be ordered to pay Mr Baxter's costs of his notice of motion seeking leave to reopen.
Mr Baxter may have had some success on that motion in that he was granted leave to adduce further evidence about the works undertaken to the Craddocks Creek Trail following the hearing. However, as noted in the Court's judgment on the reopen application, the contents of Mr Finlay and Mr Munro's affidavits raised doubts about the importance and probative value of the evidence that Mr Baxter sought to adduce, and leave was granted to both parties to rely on further evidence and submissions in the context where I considered that the interests of justice were best served by considering the materials relied on as part of the overall evidence and submissions made in the case. Ultimately, Mr Baxter's new evidence was of no weight at all. The evidence adduced by Mr Crawley in response confirmed that the works were undertaken in limited areas to remediate damage from recent extreme weather events, the track remained unsuitable for access to adjoining properties and the tyre tracks observed by Mr Baxter were not made by Mr Crawley (principal judgment at [142], [144]-[145] and [221]).
In those circumstances, and for the reasons advanced by Mr Crawley (as set out at [23] above), I have concluded that Mr Baxter should pay Mr Crawley's costs of the reopen motion, on the ordinary basis. I am not persuaded that indemnity costs should be awarded given that the evidence adduced in response to the motion to reopen was relevant to and taken into account in the Court's ultimate decision about the Craddocks Creek Trail and, in that sense, was not completely wasted.
As to Mr Crawley's notice of motion seeking interlocutory relief, I am not persuaded by Mr Baxter's submission that the Court should depart from the costs order already made on 18 April 2023 that provides for the costs of the notice of motion to be costs in Mr Crawley's cause, with the result that Mr Baxter should pay Mr Crawley's costs of that motion.
Mr Baxter's submissions that the application did not require intervention and that attempts were made by his solicitor to resolve the dispute lacked force having regard to the following matters: Mr Baxter's notice that Mr Crawley's access to the New Track would be blocked on 2 March 2023 was sent by email that day without any prior warning; the reasonable requests for information about the works and access to the New Track made by Mr Crawley's solicitor in his emails sent on 2 March 2023 did not elicit any explanation of the nature and timing of the works or why it needed to be done at that time; there was no response at all to Mr Munro's letter sent on 2 March 2023 at 3.58pm to Mr O'Brien, which referred to the earlier undertaking provided by Mr Baxter, the fact that Mr Crawley's invitees had not been provided with a key to allow other access to be viable at that time and the prospect of legal action in the absence of a satisfactory proposal; and Mr Baxter's contention that Mr O'Brien made an attempt to resolve the dispute without needing to trouble the Court was based on a telephone call made to Mr Munro's office on 28 March 2023, after receipt of the application, that went unanswered.
Mr Crawley succeeded on his application in circumstances where the Court was satisfied that he had established that there was a serious question to be tried as to whether he would be entitled to final relief by the grant of an easement over the New Track, with the attendant right to pass and repass over the easement without obstruction. While concluding that the balance of convenience did not greatly favour one party or the other, relevant and significant discretionary factors that weighed in favour of granting relief to Mr Crawley were that closing off Mr Crawley's access to the New Track was in breach of the spirit of what was described at the hearing as an undertaking given by Mr Baxter to continue to allow Mr Crawley access to the New Track during the course of the proceedings, and that Mr Baxter could not provide a timeframe as to when access would be reopened and the works on the New Track would be completed.
The remaining question is whether the Court should order Mr Baxter to pay Mr Crawley's costs of the motion for interlocutory relief on the indemnity basis. Having considered the parties' submissions and the evidence, I have concluded that the answer to that question is no and Mr Baxter should pay Mr Crawley's costs on the ordinary basis.
I accept that Mr Baxter acted in a peremptory way in blocking Mr Crawley's access to the New Track without notice and that it was in breach of the spirit of the undertaking. However, this was not a case where Mr Crawley was completely shut off from accessing his land from Scone Road via Mr Baxter's land, rather, he was given a key to the gate that allowed access to his land using the Pre-2016 Route. The Court also concluded that Mr Crawley would not be significantly prejudiced if he had to continue to use the Pre-2016 Route for a further period of time, namely, three weeks, to allow Mr Baxter time to arrange for the obstructions to be removed and to enable access along the New Track, as it was prior to 2 March 2023.
Mr Crawley's application for indemnity costs also relies, in large part, on what Mr Crawley submits is the "deliberate and ongoing breach" by Mr Baxter of Orders 3(c) and (d) made on 18 April 2023, relying on the evidence of Mr Finlay in his affidavit dated 15 June 2023. I do not consider it appropriate to express a view about that matter on this costs application in circumstances where there is no application presently before the Court concerning Mr Baxter's compliance with the 18 April 2023 orders, Mr Baxter has not been provided with a proper opportunity to respond to the allegation of breach and the matters referred to in Mr Finlay's affidavit depose to events that took place after the hearing and the determination of Mr Crawley's motion for which costs are sought.
As to Mr Crawley's contention that it would be unjust for him to bear any part of the legal costs associated with the preparation of Mr Finlay's 15 June 2023 affidavit, the issue I have with that submission is that Mr Crawley filed the affidavit in the absence of any direction to do so, without leave from the Court and without an accompanying motion or explanation for why it was filed.
For these reasons, I make the following orders: 1. The defendant to pay the plaintiff's costs of the defendant's notice of motion filed on 20 September 2022 and the plaintiff's notice of motion filed on 29 March 2023 on the ordinary basis, as agreed or assessed. 2. Save as provided for by Order 1, the defendant to pay 50% of the plaintiff's costs of the proceedings on the ordinary basis, as agreed or assessed.

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Judgment (6 paragraphs)

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